ArthroCare Announces Expanded FDA Clearance for Arthroscopic Surgery; Broadest Array of Specific Indications for Any Company Marketing Radio Frequency Arthroscopic Surgical Devices.

Business Editors/Health & Medical Writers

SUNNYVALE, Calif.--(BW HealthWire)--July 31, 2001

ArthroCare Corporation (Nasdaq:ARTC) today announced that the U.S. Food and Drug Administration (FDA) has granted the company expanded clearance to market its proprietary Coblation(R)-based disposable surgical devices for over 40 specific arthroscopic indications in the knee, shoulder, wrist, ankle, elbow and hip. The expanded clearance covers approximately 160 orthopedic procedures and represents the broadest array of specific indications approved for any company marketing radio frequency surgical equipment for arthroscopic and orthopedic applications.

Specific indications covered by the FDA's action include articular cartilage debridement, ACL/PCL repair, subacromial decompression, meniscectomy and chondroplasty. The company believes the expanded FDA clearances will allow ArthroCare to aggressively market its products for use in all cleared indications. Previously, the company's devices for arthroscopic surgery had been marketed under an FDA clearance for soft tissue resection, ablation, coagulation and hemostasis in general arthroscopic and orthopedic procedures

"We have been using ArthroCare's system for arthroscopic surgery in our practice for several years, " said Orrin Sherman MD, Assistant Professor and Chief of Sports Medicine, New York University -- Hospital for Joint Disease, Department of Orthopedic Surgery. "I am especially pleased with the amount of control I am able to achieve in delicate reconstructive procedures of the knee and shoulder. In my experience, the relatively low temperatures and controlled ablative process significantly improves the level of care I can provide to my patients."

"The expanded clearance will enhance our marketing efforts in a number of arthroscopic indications," said Michael A. Baker, ArthroCare president and chief executive officer. "It is particularly useful in articular cartilage applications as it coincides with the initial presentation of our multi-center human clinical trial data on knee surgery, which should be published in coming months. The expanded clearance positions us to continue to grow our business and refine the indications and therapies we offer."

Prospective multi-center human studies and a recently completed retrospective survey of over 4000 patients, which demonstrate the safety and performance of Coblation technology, are being prepared for publication. Recent podium presentations at the American Academy of Sports Medicine, the Arthroscopy Association of North America and the International Society of Arthroscopic Knee and Sports Medicine have also demonstrated continued excellent clinical experience with the company's arthroscopic surgical devices.

Arthrocare markets a product line of Coblation-based surgical devices for arthroscopic orthopedic applications, including over 29 unique devices, with additional models planned for release later this year. The Company believes that over the past seven years, more than one million Coblation-based surgical devices have been used clinically in arthroscopic surgery throughout the world

About ArthroCare

ArthroCare's products allow surgeons to operate with a high level of precision and control, limiting damage to surrounding tissue. The company's products operate at lower temperatures than traditional electrosurgical or laser surgery tools and enable surgeons to remove, thermally treat, or sculpt soft tissue and to seal bleeding vessels.

ArthroCare is a medical device company that develops, manufactures and markets products based on its patented Coblation technology. ArthroCare's soft-tissue surgery systems consist of a controller unit and an assortment of single-use disposable devices that are specialized for specific types of surgery. The company believes its Coblation technology can replace the multiple surgical tools traditionally used in soft-tissue surgery with one multi-purpose surgical system. Coblation technology is applicable across many soft-tissue surgical markets. The company's strategy includes applying its patented Coblation technology to a broad range of soft-tissue surgical markets, including arthroscopic surgery, cosmetic surgery, ear, nose and throat surgery, spinal surgery, neurosurgery, general surgery, and various cardiology applications. The company's website is www.arthrocare.com.

Safe Harbor Statements

Except for historical information, this press release includes forward-looking statements. These statements include, but are not limited to the company's belief that regulatory clearances will enhance the company's marketing efforts, the company's belief in the efficacy and safety of its products, the timing of publication of clinical results, and other statements that involve risks and uncertainties. These risks and uncertainties include, but are not limited to competitive risk, the company's dependence on its arthroscopic system, and the uncertainty of protecting the company's patent position. These and other risks and uncertainties are detailed from time to time in the company's Securities and Exchange Commission filings, including ArthroCare's Form 10-K for the year ended December 30, 2000 and the 10-Q for the quarter ended March 31, 2001. Forward-looking statements are indicated by words or phrases such as "anticipates", "estimates", "projects", "believes", "intends", "expects", and similar words and phrases. Actual results may differ materially from management plans.